12(1)An owner that is a trustee of a trust fund created by subsection 11(2) that has paid in whole or in part for the supply of services or materials for the improvement out of money that is not subject to that trust may retain from trust funds an amount equal to the amount the owner paid for the supply of those services or materials.

12(2)An owner that is a trustee of a trust fund created by subsection 11(2) that has paid in whole or in part for the supply of services or materials for the improvement out of money that is loaned to the owner may apply trust funds to discharge the loan to the extent that the lender’s money was used to pay for the supply of those services or materials.

12(3)An owner that is a trustee of a trust fund created by subsection 11(2) may retain from trust funds an amount that, as between the owner and the contractor, is equal to the balance in the owners’s favour of all outstanding debts, claims or damages related to the improvement or, if the contractor becomes insolvent, all outstanding debts, claims or damages whether or not related to the improvement.

12(4)For greater certainty, the following uses of trust funds by an owner are not considered an appropriation or a conversion to the owner’s own use nor are they uses inconsistent with the trust:

12(5)Nothing in this section relieves an owner from the requirement to retain a holdback under section 34.